DENVER—Auditors say Colorado highways have outdoor advertising signs that are considered illegal and could cost the state federal transportation funding if they remain in place.

State auditors say in a report released Tuesday that 30 signs along 162-mile portion they reviewed are considered illegal because they don’t have proper permits from the Colorado Department of Transportation and don’t meet other requirements.

The federal government could withhold 10 percent of a state’s transportation funding because of illegal signs. But auditors say federal officials have not often reviewed states for compliance.

The report says many state highways and interstates are subject to the federal Highway Beautification Act, which sets standards on signs to limit driving distractions and maintain natural beauty.